Prices Keep Falling As Demand Worries Outweigh Saudi Output Cut

Oil prices are down a further 0.4% after falling on Tuesday, as demand concerns came to the fore again following weak China export data. Gains following the further OPEC output cut were brief. WTI is down 0.4% to $71.44/bbl, close to the intraday low of $71.32. Brent is 0.5% lower to $75.94 just off the low of $75.83. The USD index is down 0.1%.

• China’s export growth fell 7.5% y/y in May and while it was impacted by base effects, it signals that global demand is soft. Import growth was better than expected at -4.5% y/y and crude imports rose 6.2% y/y. Also on the demand side, the US expects its 2023 oil consumption to be half of 2022’s.
• Russian output in May only fell to 9.66mbd from 9.67mbd after it promised a 500kbd reduction and now Saudi Arabia is telling Russia to be more transparent.
• Later there is US EIA crude inventory data trade data for April and earlier Bloomberg reported that API US crude inventories fell 1.71mn barrels in the latest week after a 5.2mn build, according to people familiar with the data.
• US trade and consumer credit data for April are due. German April IP prints and the ECB’s De Guindos, Fernandez-Bollo and Panetta speak. The Bank of Canada meeting is also coming up and rates are expected to be held at 4.5%.